TaxTMI 
TaxTMI 
2025 (5) TMI 2108
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....peared for the Appellant Shri Vikas Mehta, Consultant appeared for the Respondent ORDER The brief facts of the case are that an intelligence was received which indicated that some importers were importing Superior Kerosene Oil (SKO) in the guise of "Industrial Composite Mixture Plus" ("ICMP") or "Low Aromatic White Spirit" ("LAWS") under CTH 27101990, in violation of the Policy provisions, an inquiry was initiated by the Revenue and it's officers visited office premises of M/s. Shree Sanari Shipping, Gandhidham and MAT Shipping. Gandhidham and retrieved copies of the documents/emails, printouts of WhatsApp chat of Shri Virbhadra Rao with Shri Mritunjay Dasgupta under panchanama date 29.08.2018. From the above searches, it came to the notice that some importers were engaged in importing ICMP/ LAWS, declared as 'Industrial Composite Mixture Plus. The department forwarded representative samples to CRCL, Delhi to ascertain correct description of the goods. which after testing all samples drawn, opined that these samples meet the requirements of SKO (Kerosene) as per IS: 1459:1974. The test reports confirmed that the goods imported by Various importers is SKO, classifiable under ....
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....nalty, which are confirmed by the Adjudicating Authority as detailed below:- 1. SCN No. DRI/AZU/GRU/SKO-JMCI/INT-09/20/2018 dated 28.03.2019 OIO No. KDL/ADC/AK/15/2019-20 dated 19.09.2019 OIA No. KDL-CUSTM-000-APP-07 to 14-20-21 dtd. 23.07.2020 Value of the Goods - Rs. 3,29,50,412/- Main Noticee Fine Penalty under Section 112 Penalty under Section 114AA Penalty under Section 117 M/s. Jai Mata Chintpurni Impex 30,00,000 8,00,000 4,00,000 75,000 Co-Noticees Shri Virbhadra Rao Illa, Proprietor of M/s. Shree Sanari Shipping 8,00,000 4,00,000 Shri Iqbal Rahman Shaikh, Representative of M/s. Shree Sanari Shipping 4,00,000 2,00,000 Shri Mritunjay Dasgupta (Customs Broker), Proprietor of M/s. MAT Shipping 8,00,000 4,00,000 Shri R.P. Meena, Chemical Examiner Gr-I, Custom House Laboratory Kandla 8,00,000 4,00,000 Shri Ankit Tandon of M/s. Millennium Lubricant FZE, UAE 8,00,000 4,00,000 M/s. Millennium Lubricant FZE, UAE 8,00,000 4,00,000 2. SCN No. DRI/AZU/GRU/Sanari Petro/INT-06/20/2018 dated 28....
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....icee Shri Virbhadra Rao Illa, Proprietor of M/s. Shree Sanari Shipping 4,00,000 2,00,000 Shri Iqbal Rahman Shaikh, Representative of M/s. Shree Sanari Shipping 2,00,000 1,00,000 Shri Mritunjay Dasgupta (Customs Broker), Proprietor of M/s. MAT Shipping 4,00,000 2,00,000 Shri R.P. Meena, Chemical Examiner Gr- I, Custom House Laboratory Kandla 4,00,000 2,00,000 M/s. Sunrise Petroleum FZC, Sharjah 4,00,000 2,00,000 M/s. Yes Corporation 4,00,000 2,00,000 5. SCN No. DRI/AZU/GRU-3/SKO-V.V Ent/INT-09/2018 dated 26.03.2019 OIO No. KDL/ADC/AK/17/2019-20 dated 26.09.2019 OIA No. KDL-CUSTM-000-APP-15 to 22-20-21 dtd. 23.07.2020 Value of the Goods Rs. 2,82,29,064/- Main Noticee Fine Penalty under 112 Penalty under 114AA Penalty under 117 M/s. V.V. Enterprises 25,00,000 6,00,000 3,00,000 75,000 Co-Noticee Shri Virbhadra Rao Illa, Proprietor of M/s. Shree Sanari Shipping 6,00,000 3,00,000 Shri Iqbal R....
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....ompliance with the restriction or prohibition. He held that the importers failed to provide accurate and complete information about the goods and have imported SKO in the guise of ICMP with wrong classification thereof under CTH 27101990. Therefore, he confiscated the said imported goods under section 111(d), 111(m) and 111(p) ibid and imposed Redemption fine in lieu of confiscation. The adjudicating Authority also imposed penalty on the Noticees for their respective roles. 1.4 The appellants filed appeals against the OIOs before the Commissioner (Appeals), Ahmedabad. The department also filed appeals before the said Authority against imposition of imposing low penalties. The Commissioner of Customs (Appeals), Ahmedabad by way of passing impugned OlAs disposed of the appeals by setting aside the OIO dated 19.09.2019 with consequential relief to the appellants. The department's appeals were also dismissed. The Commissioner of Customs (Appeals), Ahmedabad placed heavy reliance on the CESTAT Order No. A/11026-11028/2020, dtd.01.06.2020 in the case of M/s. Swarna Oil Services (2020-TIOL-970-CESTAT-AHM], considering the fact of the said case as identical to the present case. He took th....
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....parameters have been met, as the same forms a part of the suppliers test reports and is within the parameters specified in IS 1459:1974 (reaffirmed in 1996). However in respect of the other two parameters regarding burning quality and colour there is absolutely no evidence that the revenue has produced to establish that the said two parameters are met with. The revenue has neither through test results nor otherwise lead any evidence to show that the said two parameters were also met with." 3.1. It was therefore the submission of the Respondent/Assessee that in the matter of products which have a scientific nature, test report is the ultimate evidence and if it is not tested, on BIS parameters totally, the same cannot be said to be conclusive as was held by this Tribunal in the case of M/s Swarna Oil Services (cited supra). He also submits that in the recent judgment, Hon'ble Supreme Court has underlined the importance of testing on all parameters of scientific products while reversing the decision of Hon'ble High Court of Gujarat in the matter of Gastrade International Vs. Commissioner of Customs Kandla as reported in 2025 (4) TMI 23 (SC). He seeks to place reliance on paras 79 to....
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.... Schedule to the Tariff Act are to be classified, which had escaped the attention of all the three forums below and each forum had adopted its own methodology to determine the proper classification of the goods/substance in issue as discussed above dehors the aforesaid rules for interpretation. 41. Rule 1 of the aforesaid Rules lays down that the classification shall be determined on the basis of the terms of the headings and relative Section or Chapter Notes. Rule 2 is to be invoked when it relates to an incomplete or unfinished article or a mixture of substances, with which we are not concerned. Rule 3 is attracted when for certain reasons, the goods are prima facie classifiable under two or more headings. This situation also does not arise in the present case. Rule 4 further provides that goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are "most akin". 4.2 From the above, it is clear that the Apex Court had clearly noted that the first preference has to be given in determining classification, to the headings and relevant section & chapter notes. The principle "most akin" com....
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....nt reported in Bombay Oil Industries (P) Ltd. v. Union of India, 1995 (77) E.L.T. 32 (S.C.), where this Court held following Union of India v. Delhi Cloth & General Mills Co. Ltd., 1963 Suppl. (1) SCR 586 = 1977 (1) E.L.T. (J 199) (S.C.), that if the method of testing of any item of Central Excise tariff is not mentioned, then the Indian Standard Institution's method should be applied. That this would apply to the Customs Act as well. IS 436 lays down :- "5. SAMPLING FROM SHIPS DURING LOADING OR UNLOADING 5.1 Sub-lots - For the purpose of sampling, the entire quantity of coal in a ship shall be divided into a suitable number of sub-lots of approximately equal weight as specified in Table 1. 5.1.1 A gross sample shall be drawn from each of the sub-lots and shall be kept separately so that there will be as many gross samples as the number of sub-lots into which the lot has been divided. 5.2. Sampling of coal from ships shall be carried out, as far as practicable, when coal is in motion. If it is taken on a conveyer, the gross sample shall be collected as per the procedure laid down in Table 3. If not, the gross samples may be drawn during loading or unloading of the ship. For....
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....iling point, degree C - 152 B) Percentage recovered below 200 degree C, Min. 20 84 C) Final boiling point, degree C. Max. 300 252 D) Dry Point, degree C - 250 3. Flash Point (Abel), degree C, Min 35 44 4. Smoke Point, mm, Min. 18 26 5. Density at 15degree C gm/cc - 0.7926 6. Aromatic Content, % by volume - 16.0 On the basis of above parmeters the sample u/r meets the requirements of SKO (Kerosene) as per IS: 1459-1974," On perusal of the above test report, I find that Joint Director, CRCL, New Delhi, in his test report has reported that the sample conforms to the specification of Kerosene as per IS: 1459-1974. In this regard, I find that the appellants have relied upon an identical case of M/s Swarna Oil Services, where Hon'ble CESTAT vide its Final Order No. A/11-26-11028/2020 dated 18.12.2019 set aside the OIA No.MUN-CUSTM-000-APP-80-81-19-20 dated 19.08.2019 and allowed the appeal. In the Final Order No. A/11-26-11028/2020 dated 18.12.2019 issued by Hon'ble CESTAT in the case of M/s Swarna Oil Services, the test report issued by CRCL, New Delhi has been reproduced in paragraph 6 thereof, ....
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....shed by any inferential process or otherwise. Insofar as Sulphur is concerned, though no test have been undertaken, we will for the sake of our discussion assume that the said parameters have been met, as the same form a part of the suppliers test reports and is within the parameters specified in IS 1459:1974 (reaffirmed in 1996). However in respect of the other two parameters regarding burning quality and colour, there is absolutely no evidence that revenue has produced to establish that the said parameters are met with. The revenue has neither through test results nor otherwise lead any evidence to show that the said two parameters were also met with." 7. Hon'ble Tribunal had, relying upon the case law decided by the Apex Court in the case of HPL Chemicals-2006 (197) ELT.324, held that the burden of classification is on the revenue. In the last paragraph of Final Order No.A/11-26-11028/2020 dated 18.12.2019 in the case of M/s Swarna Oil Services, Hon'ble CESTAT has held as follows: "14. In our view, in the absence of evidence that the imported goods meet with all the specifications laid down in supplementary note (c) to chapter 27, for a product to be classified as Ke....